Greenwich resident pleads guilty to securities fraud

Published 3:26 pm, Monday, December 21, 2015

A Greenwich resident pleaded guilty Monday to a multimillion-dollar securities fraud scheme while he was head of commercial mortgage-backed securities trading at Stamford-based RBS Securities.

Adam Siegel, 37, waived his right to indictment and pleaded guilty in Hartford federal court.

According to a news release, Siegel admitted that he and others conspired to increase RBS’s profits on residential mortgage-backed securities and collateralized loan obligations bond trades at the expense of customers. As part of the scheme, Siegel and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for bonds, all to benefit RBS.

The fraud took place between July 2008 and approximately 2014, federal officials said.

The conspiracy was perpetrated in two ways. In certain transactions, Siegel and his co-conspirators misrepresented the seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS. In other transactions, Siegel and his co-conspirators misrepresented to the buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller, which allowed RBS to charge the buyer an extra, unearned commission.

The investigation revealed numerous fraudulent transactions by Siegel and other members of the conspiracy that cost at least 35 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.